Grover, also owner of the Maine Center for Continence and Pelvic Disorders and the Laser Vaginal Rejuvenation Institute, agreed in March to pay nearly $300,000 to settle a federal complaint over improper billing of Medicare and MaineCare.

In the summer of 2009, Grover informed federal regulators about billing problems that included overbilling for various gynecological services and billing for services that were never performed.

After an investigation by the U.S. Attorney’s Office, U.S. Department of Health and Human Services, and the Maine Attorney General’s Office, Grover and Bangor Women’s HealthCare became the subjects of a civil complaint alleging violation of the federal False Claims Act from January 2008 through January 2009 for the improper billing. Grover cooperated with the investigation.

In a related criminal action brought in 2011, a former employee of Bangor Women’s HealthCare pleaded guilty to fraud charges and was sentenced to more than three years in prison. Dawn Zehrung, who worked at the practice from June 2006 to January 2009 and was solely responsible for billing in 2008, admitted to submitting fake bills to insurance companies and naming herself as a patient for services she did not receive, according to the U.S. Attorney’s Office. The practice was overpaid by Anthem Blue Cross Blue Shield, MaineCare and Medicare by more than $300,000.

Zehrung, who personally used some of the funds according to Grover’s bankruptcy filing, was sentenced in August 2011 and ordered to pay $355,000 in restitution. She was required to begin payments while serving her prison term, said Virginia Villa, Zehrung’s public defender in the case.

Grover’s practice spent the overpayments, though Zehrung received a portion of it as bonuses based on the practice’s increase in income, according to Villa. The practice claimed Zehrung received about $32,500 in unauthorized monies, she said.

“Ms. Zehrung regrets her actions and is saddened by the closure of the practice,” Villa wrote in an email.

Grover has been shouldering repayments through his settlement agreement.

At her sentencing, Grover told the federal judge that Zehrung’s actions “led our practice to the brink of financial ruin.”

He filed for bankruptcy at U.S. Bankruptcy Court in Bangor on behalf of the State Street practice in May. The bankruptcy case remains ongoing.

Grover is making payments on the restitution, said Portland attorney Jay McCloskey, who represented the physician. Grover had hoped to keep the practice open despite the bankruptcy, he said, but the sizable repayments “would have been such a hole that it was difficult to crawl out,” McCloskey said.

A review by a U.S. trustee included in the court documents states that Grover, “despite no wrongdoing,” was forced to file for bankruptcy because he had to repay the overbillings. The review also cites as outstanding debts the purchase of office equipment, business loans, professional dues and trade creditors.

The practice employed eight people.

Grover, an osteopathic doctor, has clinical privileges at Eastern Maine Medical Center and performed surgery at both EMMC and St. Joseph Hospital. He resigned his clinical privileges at St. Joseph as of Dec. 23, according to a hospital spokeswoman.

He has run his practice since 1994 and his Maine medical license remains active, according to a state licensing database.

Attempts to reach Grover for comment were unsuccessful. His patients’ medical records were transferred to another local obstetrician-gynecologist, according to the notice on his practice’s website. Grover left no forwarding information at that office or at EMMC. McCloskey did not have information about Grover’s future plans.

Clarification: This article has been updated to clarify that Dawn Zehrung received only a portion of the practice’s overbillings in the form of bonuses, and was ordered to begin paying restitution while in prison, according to her attorney.